As cyber crime and e-commerce continue to boom, most states are failing to keep up with the increasingly sophisticated threats, according to a new study. Consumers could lose confidence in online shopping if attorneys general don't get more aggressive about prosecuting Internet fraud, the report stated.

In 2007, the Federal Trade Commission had 221,226 complaints of Internet fraud, nearly 16,000 more than it received the previous year. The report warns that those figures might understate the problem, given that consumers many times do not know that they have been targeted.

Examining the lists of Internet-related prosecutions brought by state attorneys general found in Cybercrime, the bimonthly newsletter of the National Association of Attorneys General, the report's authors found that the bulk of the cases involved child pornography or the sexual solicitation of minors.

"Many states have established special investigative units or task forces on child predators," they wrote. "Few states have devoted similar investigative resources toward cracking down on Internet fraud."

The issue of online child predators, always a splashy headline, recently got an official endorsement with the announcement from 49 states' attorneys general and MySpace of a joint task force to tackle the problem. Facebook later joined the initiative; Texas is the lone holdout.

The report (PDF), prepared by the left-leaning think tank Center for American Progress and the policy-reform group Center for Democracy and Technology (CDT), pointed out that a few states stand out for their aggressive stance on cyber crime, such as Washington and New York.

Still, the great majority of states are failing to respond to the new and emerging threats that are unique to the Internet.

"Online consumers are now at risk," Ari Schwartz, COO and vice president at the CDT, said in a statement about the report's findings. "Internet crime costs basically nothing to execute, can be highly lucrative and involves little risk of being caught and punished. We need all 50 state attorneys general focused on this problem."

Cobbling together information from the FTC, the individual states and the Cybercrime newsletter, the researchers were challenged with coalescing widely varying data sets. Many states were uncooperative, and several admitted that their reporting systems were out of date or inaccurate, making it impossible to classify complaints by segment.

Of the 30 states that provided their ranked data regarding consumer complaints, 24 states reported that Internet-related issues were in the top 10. In four states, complaints about Internet issues ranked at the top of the list.

Issues relating to online sales or services made up the lion's share of the complaints reported by the states, though many of the states did not provide the researchers with information on complaints relating to spam, spyware and phishing.

The researchers noted that a complaint against an online retailer that failed to deliver merchandise as promised, for instance, closely mirrors the consumer issues that emanate from the physical world. The report's authors alleged that where the states fall short is on the uniquely online scams.

By way of policy recommendations, the study's authors called on states to devote more resources to fighting cyber crime, review and update their laws, and for the attorneys generals' offices to coordinate their efforts in combating a breed of criminal activity that moves fluidly across interstate borders.